Will the Chevron Corporation Stock Continue Its Downtrend?

• Morgan Stanley raised the target price for the Chevron corporation to $203 from $198.
• The CVX stock price has surged by a mere 5.58% in a year.
• Chevron Corporation’s net income has declined by over 48% (YOY) in the previous quarter. 

The CVX stock price has declined by $3.89 or 2.33% in the previous trading session, the stock has given a close at $163.04. The stock price has declined by over 3% in a week, but surged by just 0.35% in a month and 5.58% in a year. It shows that the stock is consolidating in a range and it is trading flat for more than one year.

Chevron Corporation’s revenue has declined by over 7% and 27% in both quarters of the year 2023. However, the revenue has increased from $110.48 Billion in 2016 to $236.37 Billion in 2022. The net income has also declined in the previous quarter by over 48% (YOY). The net income has jumped by over 126% in the previous financial year, which is a good sign for the company.

The firm has reduced the net debt from $28.86 Billion to $8.84 Billion in one financial year. It shows that the company has taken some corrective action to reduce the net debt of the company. The company has paid a dividend of $5.68, with a dividend yield of 3.16% which is adequate. The dividend-seeking investors can consider this stock for a few gains.

What story the chart is telling?

The CVX stock price has given a fake breakout on the chart, as the stock price has breached the resistance level of $169.4. The price showed a great decline afterwards and trapped the buyers who had taken a buy position in the stock. This stock’s price has formed a base near the level of $150. The stock price has been supported by the rising trendline in this uptrend.

If we observe, the nearest resistance level for the price is at the $169-$171 level. The other resistance level for the price is present near the level of $183.30. The first support level for the price is present near the level of $156.70 and the other support is present at the level of $148.76.

A short discussion of the indicators

Exponential Moving Averages

The Exponential Moving Averages have shown a golden crossover as the 50-day EMA has crossed the 200-day EMA on the upside. Right now, the EMA is providing some sort of support to the price as the price is declining from the resistance level.

Relative Strength Index

Currently, the RSI is sloping downward and is placed below the 50 level, which indicates that the momentum is favouring the bears. The RSI has shown a bearish divergence at the upper level in accordance with the price. 

Conclusion

As the price has declined sharply from the resistance level, the RSI is also supporting this bearish momentum. So, the price can try to achieve the $156.70 level. If the price rises from that level, it can face rejection from $169.44 and $183.30 levels. If the price breaks the support level of $156.70, it can fall further to the level of $148.76.

Technical Level

Resistance – $169.44 and $183.30

Support – $156.70 and $148.76

Disclaimer

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